Our View – Triple Lock Pension

IT looks as if the Conservative Government in the UK will be wincing once again over the triple lock pension promise as in theory state pensions should jump by 8.5 per cent in April of next year.

What must have appeared as a great idea at the time with relatively low inflation is now becoming a major financial problem for the Government and it looks as if wily politicians are investigating ways to bring pension rises down.

Possibly the most benign option is to remove public sector bonuses from the calculations as there were several significant amounts awarded in order to avert some (if not all) strikes over the summer period.

Economists suggest that by removing these from the calculations then the Government would save £1 billion granting a pension increase of a still attractive 7.8 per cent next April.

The triple lock guarantees that pensions are increased by total pay growth, inflation, or 2.5 per cent, whichever is higher but currently it seems that pensions are generally growing faster than wages and with more pensioners living longer and fewer new workers contributing to the economy, there will come a time when there certainly isn’t enough money to go around.

Whichever way you look at it, it’s a political hot potato especially as by 2024 it is more than likely that all who were born in the UK will be eligible to vote in General Elections, not just those who left Britain less than 15-years ago.

The next election looks as if it’s going to be a close run thing so those in Spain receiving the UK State Pension should enjoy next year’s increase as the triple lock could soon be a thing of the past.

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Written by

Maureen Doninger

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